Hepatitis C virus (HCV) infection has been increasingly recognized as a major cause of chronic hepatitis, liver cirrhosis and hepatocellular carcinoma (HCC). The proportion of individuals infected more than twenty years, who face the highest rate of complications, is expected to increase over the next ten to twenty years. Approximately 85 percent of infected individuals fail to clear the virus. A central unresolved issue in HCV infection is how the virus establishes persistent infection in most infected individuals. A number of recent studies have suggested that failure of HCV clearance is associated with weakness in 1-cell responses against the virus. Although HCV-specific T cells are readily demonstrable in most chronically infected individuals, their frequency in the liver and peripheral blood is unusually low, when compared with other viral infections. It is not clear whether this is due to failure of generating virus-specific T-cell response or due to increased apoptosis of activated effector 1 cells. Accumulating evidence has shown that the liver may play an important role in T cell homeostasis by trapping and eliminating activated T cells, especially CD8+ 1 cells. The central hypothesis of this proposal is that hepatocytes infected by HCV causes premature apoptosis of HCV-specific T cells in the liver, leading to attenuation of T-cell response. In support of this hypothesis, our preliminary studies have shown that apoptosis of activated CD4+ and CD8+ T cells was accelerated after exposure to hepatocytes expressing HCV core, El and E2 transgenes either in vitro or in vivo. This was accompanied by up-regulation of the expression of Fas ligand (FasL or Apo- I ligand), one of the death-inducing molecules, in transgenic hepatocytes, and could be blocked by antibodies against Fas in vitro and in vivo. The experiments proposed here are specifically designed to extend our observations, and to validate our hypothesis in vivo. Specifically, we propose to: 1) Determine the in vivo significance of increased T lymphocyte apoptosis in HCV transgenic mice; 2) Determine whether Fas: FasL interactions are critical to apoptosis of activated T cells in this system; and 3) Characterize the HCV proteins regulating apoptosis of activated T lymphocytes using novel adeno-associated virus vectors to express HCV proteins in murine hepatocytes. These data would confirm one mechanism of HCV persistence may be attenuation of the immune response in the principal site of viral replication, and might suggest new therapeutic strategies to augment the effectiveness of the immune response.